BOOST THESE 3 KPIs TO IMPROVE YOUR OTC SALES Elevate OTC Performance in Your Pharmacy
You know that the key to the success of your pharmacy isn’t just filling prescriptions; it’s also in the over-the-counter (OTC) sales that can significantly boost your bottom line. We want to dive deep into a crucial topic for your pharmacy’s success — KPIs for improving your OTC performance. Before that, let’s recap: Ensuring your pharmacy’s foundational KPIs are solid is paramount. Your payroll ratio should be under 13% (ideally less than 11%), inventory turns at 24 or higher, and your expense ratio should be below 19%. Once you’ve got these critical KPIs in the green zone, it’s time to shift your focus to optimizing your OTC sales. There are three vital OTC KPIs we recommend monitoring closely: OTC Dollars per transaction, OTC Dollars per prescription (Rx), and OTC Dollars per employee hour. 1. OTC DOLLARS PER TRANSACTION This KPI helps you gauge the effectiveness of your staff’s recommendations to customers. Calculate it by dividing your total OTC revenue by the number of transactions within a specified period. While there’s no one-size-fits-all benchmark for this metric, competing against your past
performance can be incredibly insightful. You can aim to increase this number by encouraging the purchase of more items or more valuable items per transaction. 2. OTC DOLLARS PER RX Patients on prescription medications often require OTC products, whether it’s a probiotic to counter GI side effects or vitamins for drug-induced nutrient depletion. To calculate this KPI, divide your total OTC revenue by the number of prescriptions filled. This metric helps you understand whether you’re adequately serving your patients’ needs with the right OTC recommendations. Again, there’s no industry benchmark, but striving to improve from your current standing is essential. 3. OTC DOLLARS PER EMPLOYEE HOUR This KPI focuses on your non-prescription-based revenue and the efficiency of your ancillary staff. Calculate it by dividing your total OTC revenue by the number of ancillary staff hours. Knowing where you stand allows you to set improvement goals and incentivize your front-end staff effectively. For instance, you might consider rewarding employees who excel in generating OTC dollars per hour with cash bonuses or preferred schedules. Aiming for a 50% increase in OTC performance within a quarter is ambitious but achievable with the right strategies. Engage your team in understanding these KPIs and their impact on the pharmacy’s success. Encourage them to make thoughtful recommendations, understand your product range, and communicate the benefits of OTC products to customers. You mustn’t overwhelm them with KPIs but motivate them to communicate more effectively with your patients. You can even turn it into a friendly competition! Whatever you do, just ensure you’re offering a reward to motivate your staff. Remember, your OTC sales are not just an additional revenue stream; they’re an opportunity to provide comprehensive care and support to your patients. When you focus on these KPIs, you can enhance patient care, empower your team, and ultimately, drive your pharmacy’s growth and success. Let’s make this year a turning point for your OTC sales performance, ensuring your pharmacy stands out as a leader in patient care and business acumen.
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